Canada's post-secondary industry predicts a storm ahead, as budget cuts shrink courses, staff

Amid cuts to staff, programs and student services, Canada's post-secondary system is moving into a stormy period. Students, faculty, post-secondary institutions and experts predict challenging times ahead as colleges and universities report budget shortfalls, exacerbated by federal restrictions on new international students, ongoing domestic tuition caps or freezes, and stagnant provincial funding.

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As provincial operating funding for post-secondary institutions has decreased over time, schools have looked elsewhere to make up the difference. 

"We've been able to pretend we've got a world-class university system for the last 15 years. It's been the international students that have kept it all afloat," said consultant Alex Usher, president of Higher Education Strategy Associates.

With fewer international students, "you have to say to Canadian students and their parents ... 'Maybe it's time for you to pay,' or to say to government, 'It's time for you to start increasing your contributions to universities and colleges.'" 

Universities, from the University of Manitoba to Newfoundland and Labrador's Memorial to Dalhousie in Nova Scotia, have noted significant drops in international student enrolment, with some projecting budget shortfalls tied to losing that tuition revenue.  

Colleges are also facing rough waters. Ontario's Seneca College closed one of its campuses in October, citing the drop in international students, while fewer international applications and enrolment contributed to Mohawk College's projection of a $50-million deficit for 2025-26.

Ontario's situation is particularly dire: Home to 40 per cent of Canada's university system, the province "on a per-student basis, has spent less money on post-secondary education than any other province for 43 of the last 45 years," Usher said.

Against that backdrop and now with fewer international students, Ontario institutions are also grappling with domestic student tuition having been frozen since 2018-19 and higher labour costs, after the repeal of a government bill that restricted public-sector wages.

Ten Ontario universities already reported financial losses of more than $300 million in 2023-24, projecting $600 million in 2024-25, according to Steve Orsini, president of the Council of Ontario Universities. 

For studies in humanities, business or law, for instance, domestic tuition can come close to covering those programs' costs. But others — like coveted STEM university programs, or health studies touted by governments to fill labour shortages — cost much more to deliver than domestic tuition covers. Institutions can't simply run those at a massive loss, Usher said. 

Parents "want their kids to get into computer science at [McMaster] or Waterloo or wherever, and it's just incredibly difficult to get in," he said.

"It will get significantly harder in the next little while."

Required to make major cuts to their budgets, institutions will likely cut course offerings, Usher said. He predicts a "bonfire of programs" specifically at colleges, which already tend to be more volatile than universities.